Which of the Following Is true Regarding the Use of Simulation

question 93

Multiple Choice

Which of the following is true regarding the use of simulation?

• A) It is always very easy to build a simulation model.
• B) It is very inexpensive to use a simulation model.
• C) It always yields optimum solutions.
• D) It allows time-compression in testing major policy decisions.
• E) Few constraints, if any, have to be considered.

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Definitions:

Fixed Assets

Long-term tangible assets, such as buildings and machinery, used in operating a business and not expected to be consumed or converted into cash within a year.

Dividend Discount Model

A method used to estimate the value of a company's stock by discounting predicted dividends to present value.

Constant-Growth

A valuation model assuming a steady rate of dividend growth for a stock.

Required Return

The minimum expected return investors demand for a particular investment, reflecting its risk level.